TABLE 3-1 Typology of Federal/Nonfederal Funding Arrangements

 

Required

Voluntary

Awardee Level

I. Cost Sharing or Matching Required of Awardees

II. Voluntary Cost Sharing by Awardees

Agency Level

III. Nonfederal Funding Secured by Federal Agency

IV. Nonfederal Funding Volunteered to Federal Agency

COST SHARING OR MATCHING REQUIRED OF AWARDEES

In federal parlance, cost sharing usually is defined as an arrangement in which a portion of a federal project’s or program’s costs are not borne by the federal government. Matching of funds is often considered to be a special case of cost sharing in which the federal government matches private or state funding for a program dollar for dollar (Feller, 1997). Matching also usually implies the provision of cash rather than in-kind contributions. However, these terms are not used consistently, even within federal policy documents. For example, in the Office of Management and Budget’s (OMB’s) Circular A-110, “Uniform Administrative Requirements for Grants and Agreements with Institutes of Higher Education and Other Non-Profit Organizations,” cost sharing and matching are treated as interchangeable terms. In this report, cost sharing will be used as the general term for all costs contributed to a research project by an awardee institution from sources other than the federal award. Matching is the special case of cost sharing in which the awardee institution must match federal funding dollar for dollar, either in cash or through in-kind contributions, or a combination of both.

The amount of cost sharing may be a specific percentage of the total funding, a minimum or maximum percentage of the total funding, or it can be open ended. Industry or another nonfederal organization might be the source of the cost sharing.

Cost sharing may be a condition of eligibility to apply for funds or it may be a criterion of proposal review, as many federal agencies require the applicant organization to pay part of the cost of an R&D project. As an eligibility condition, the applicant must show in the proposed budget where the required percentage of cost sharing is applied and must provide letters of commitment from the sources of cost sharing. In these cases, cost sharing is usually a fixed percentage or a minimum percentage. In other cases, cost sharing is encouraged rather than required, with one of the review criteria being the extent of university or industry commitment, either monetary or in kind (see, for example, U.S. Army Research Office, 2003). Matching award amounts can be increased during review, or a ceiling may be imposed on the amount of matching funds that can be provided in order to prevent a bidding war among applicants.



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